How can I trade the AUD/USD risking the least amount possible?
A Forex deal is a contract agreed upon between the trader and the market maker (i.e. the Trading Platform). The contract is comprised of the following components: Timeframe can also be a factor but we will only focus on “Day” or “Spot” trading where deals have a lifespan of no more than one full day….
What do most forex traders do when they trade forex?
To accurately capture the information requested in this question for the foreign exchange market is difficult. This is due in part because foreign exchange is mainly traded on an over the counter basis rather than on a centralised exchange and as such, much of this information remains proprietary in nature. Also complicating this question is…
What is a popular strategy for short-term forex traders?
For many traders, trading key announcements is seen as an opportunity to profit quickly due to the volatility that surrounds these events. One such event that is popular with traders is the US non-farm payrolls. This occurs on the first Friday of every month. The non-farm payroll is the measure of how many new jobs…
Why do forex traders always talk about range trading?
No, range trading doesn’t require you to use a laptop while you are in the saddle….it is a way of taking advantage of markets where a clear trend exists, and prices range up and down within a well-defined channel. Range trading is a strategy that depends on selling highs and buying lows of a well-defined…
Why do futures prices converge on spot prices during the delivery month?
Prior to expiry, the price of futures contracts will most likely either be at a premium to the physical or a discount. As the contract approaches expiry these two prices will converge, or meet. Why does this happen? There are a number of factors involved here; one of the main reasons is what’s called cost…
Can the futures market predict if the Australian sharemarket will open higher or lower?
Investors use the futures market to predict whether the Australian sharemarket will open higher or lower on a daily basis. This can be achieved in several ways including reviewing offshore futures contracts, in markets like Europe and the United States to see how particular stock indices, including the FTSE and the S&P500 traded overnight. In…
Before you start trading options – ask yourself these 5 questions
When I started trading, I merely focused on what I was going to buy with all the money I planned on making. Needless to say, the money went within my first 6 months of opening an account. What happened? Well, as they say, a fool and his money are soon parted. I was a fool…
Can I buy an option that lasts for two or three years?
This is most certainly true. Most optionable stocks have longer term option contracts, some of which do not expire until December 2011. In reference to a starting point an investor always needs to reflect on their trading objectives, or views as this will always form the basis of their trading strategy. Keeping in mind that…
Trading the top 200 Aussie stocks with an eye on the SPI or the XJO, but never both
I have been trying to understand why the SPI and XJO follow the same intraday and daily trajectory. I have asked a number of people but have not yet obtained a satisfactory answer. On any given trading day a multitude of people trade the top 200 Australian stocks, with little or no concern for the…
Capitalising on price movements in reporting season
I am currently a new trader and I’m playing the Sharemarket Game and over the weeks I closely analyzed all the companies. To my complete surprise one of the companies (Downer EDI) went from -0.81% on the 20 Feb to 14.29% on the 21 Feb and there were no announcements prior to this. The day…
